Nvidia launches investigation into CEO's alleged relationship with Chinese spy

FADEL: NPR tech correspondent John Ruwitch is here to tell us more. Good morning, John.

JOHN RUWITCH, BYLINE: Good morning.

FADEL: So why did Nvidia launch this investigation?

RUWITCH: Yeah. The board was following up on reports not yet confirmed by NPR that CEO Jensen Huang had an affair with a Chinese woman who U.S. intelligence agencies believe was recruited by China's main spy agency to gather information on him and potentially to try to influence U.S. policy. Nvidia did not mention China in its announcement online of the investigation. But it did say the spark for this was reporting that Huang was, quote, "the target of a foreign intelligence effort."

The company also posted a memo that Huang sent to staff at Nvidia admitting to having an affair and apologizing for it. In the memo, he said he supports the board's investigation and will fully cooperate. Now, for China's part, they've said that the allegations are unsubstantiated.

FADEL: Now, we don't cover many stories about allegations of corporate espionage. Explain why Nvidia and Huang are different.

RUWITCH: Yeah. There's two huge reasons. No. 1 is that Nvidia is a linchpin of the U.S. economy. It's one of the biggest companies in the world. And right now, it's at the heart of the AI revolution. It makes the most widely used microchips to train and run AI. The second reason that this is a big deal is that Jensen Huang has enjoyed extraordinary access to the president of the United States. They talk on the phone. He even traveled to China with President Trump in May aboard Air Force One.

Now, according to news reports, Trump was briefed on intelligence about Huang's relationship over a year ago. And yesterday he was asked by a reporter if in hindsight, he should have acted on it.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER #1: ...Briefed about...

PRESIDENT DONALD TRUMP: No, I don't think so.

UNIDENTIFIED REPORTER #1: ...The spying last year?

TRUMP: I think - you know, I think he's an honorable guy. I think he probably has an excuse for it, you know. And you have to hear it.

FADEL: What has Huang's stance been on the AI race with China?

RUWITCH: Yeah. The U.S. restricts exports of certain kinds of cutting-edge chips to China, including Nvidia's best microchips. And Jensen Huang has made the argument that if we let China buy these chips, they would get hooked. Their own chip-making industry will develop more slowly, and that that would be good for America. Samuel Bresnick of Georgetown University, though, says the spy allegations just raise a raft of questions about what Huang has said.

SAMUEL BRESNICK: It calls into question the - that entire approach. It calls into question, you know, was he acting in the best interests of the United States to a certain degree, right? Has he compromised U.S. national security because of this relationship?

RUWITCH: And I will note that the Trump administration has loosened some of the chip export controls, and some previously restricted Nvidia chips can now be sold to China.

FADEL: What does this mean for Nvidia as the investigation moves along?

RUWITCH: A spokesperson said the investigation will not slow Nvidia down and that Jensen Huang is committed to continuing to lead the company. So he's still in charge. In its statement online, the company said the board has no reason to believe that either national security or Nvidia's secrets were compromised. But this issue does seem to be snowballing. Last week, members of the House of Representatives made a request for Huang to appear for a closed-door briefing on his interactions with the woman who's at the center of this whole thing.

FADEL: NPR's John Ruwitch. Thank you, John.

RUWITCH: You're welcome.

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